The Financial Stability & Development Council (FSDC) has promised to keep a “constant vigil” and be in a state of “preparedness” to manage any external and internal vulnerability that may affect the economy.

Besides discussing the challenges faced by the economy, the FSDC, chaired by Finance Minister Arun Jaitley, which met on Tuesday, noted that the country today enjoyed “macro-economic stability” on the back of an improvement in its macro-economic fundamentals and structural reforms with the launch of the Goods and Services Tax (GST).

Action being taken to address the twin balance sheet (TBS) challenge, extraordinary financial market confidence reflected in bonds and especially stock valuations and long-term positive consequences of demonetisation have also bolstered the macro-economic situation, the FSDC said.

But India’s progress to a higher growth trajectory of, say, 8-9 per cent looks difficult given the predominance of the twin balance sheet problem manifested in the form of a leveraged corporate sector and stressed banking sector, according to economy watchers.

The FSDC took note of the progress of the Financial Sector Assessment Program for India jointly conducted by the International Monetary Fund and the World Bank. It has directed that the assessment report should be finalised by the end of this calendar year.

The FSDC took note of the developments and progress made in the setting up of a Computer Emergency Response Team in the Financial Sector (CERT-Fin) and a Financial Data Management Centre and discussed measures for time-bound implementation of the institution-building initiative. A brief report on the activities undertaken by the FSDC Sub-Committee Chaired by the RBI Governor was placed before FSDC. The council also undertook a comprehensive review of the action taken by members on the decisions taken in earlier meetings.

The council discussed the Central KYC Registry (CKYCR) system, took note of the initiatives taken in this regard by the members and discussed the issues/suggestions in respect of operationalisation of CKYCR. It also deliberated on strengthening the regulation of the credit rating agencies.

The FSDC comprises Urjit R. Patel, Governor, Reserve Bank of India; Ashok Lavasa, Finance Secretary; Subhash Chandra Garg, Secretary, Department of Economic Affairs; Anjuly Chib Duggal, Secretary, Department of Financial Services; Tapan Ray, Secretary, Ministry of Corporate Affairs; Ajay Prakash Sawhney, Secretary, Ministry of Electronics and Information Technology; Arvind Subramanian, Chief Economic Adviser; Ajay Tyagi, Chairman, SEBI; TS Vijayan, Chairman, IRDAI; Hemant G Contractor, Chairman, PFRDA.

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